Triple Jeopardy: Civil, Disciplinary, and Regulatory Proceedings against Professionals

18 septembre 2015 | Philip A. Carson

( Disponible en anglais seulement )

Members of regulated professions, such as engineers, architects, financial advisors, and health professionals, can face multiple proceedings arising from the same conduct.  For instance, for a single event, an engineer may be sued in civil proceedings for negligence, be charged under building code or safety legislation, and face disciplinary proceedings of his/her professional body.  The engineer has no control over the sequence of such multiple proceedings.

The insurer’s interest is solely in the outcome of the civil proceedings, however, adverse rulings in regulatory and/or disciplinary proceedings can have a significant impact on those civil proceedings.  Consequently, in practical terms, it may be prudent for the insurer to ensure that the insured is properly defended in the parallel proceedings. This article explores, from the insurer’s perspective, the interplay among the civil, quasi-criminal, and disciplinary proceedings.

At common law [Hollington v. F. Hewthorn & Co., [1943] 1 K.B. 587 (Eng. C.A.)], findings in criminal proceedings were held to be inadmissible in subsequent civil proceedings.  In Hollington, a case involving automobile negligence, the plaintiff could not tender evidence of the criminal conviction of the defendant arising from the same occurrence.  The Canada Evidence Act and corresponding provincial legislation, however, provides that evidence of a prior conviction is admissible.  Further, Canadian jurisprudence has diverged from the English common law and has defined the admissibility and weight that may be given to criminal convictions.

The principles articulated in the leading Canadian case, Del Core v. College of Pharmacists (Ontario) (1985), 51 O.R. (2d) 1 (Ont. C.A.), were reaffirmed in Franco et al. v. White, (2001) 53 O.R. (3d) 391 (Ont. C.A.).  In Del Core, a pharmacist had been criminally convicted of obtaining pharmaceuticals by fraudulent means.  The admissibility of evidence of that conviction was challenged by the disciplinary committee that was examining the same conduct.  The court ruled:

[per Blair JA] The prior conviction must of course be relevant to the subsequent proceedings. Its weight and significance will depend on the circumstances of each case…

Since evidence of prior convictions affords only prima facie proof of guilt it follows that its effect may be countered in a variety of ways. For example, the conviction may be challenged or its effect mitigated by explanation of the circumstances surrounding the conviction. It is both unnecessary and imprudent to attempt any exhaustive enumeration…. It would be highly undesirable to replace this arbitrary rule by prescribing equally rigid rules to replace it. The law should remain flexible to permit its application to the varying circumstances of particular cases.

The right to challenge a conviction is subject to an important qualification. A convicted person cannot attempt to prove that the conviction was wrong in circumstances where it would constitute an abuse of process to do so…. Courts have rejected attempts to relitigate the very issues dealt with at a criminal trial where the civil proceedings were perceived to be a collateral attack on the criminal conviction. The ambit of this qualification remains to be determined in future cases.

It also provided the following caveat:

[per Houlden JA] The problem of using certificates of criminal conviction in civil actions, is that the criminal offence does not always translate freely into a civil cause of action. In cases where it does not, the proof of conviction may be of limited help, but in either case, to insist that the civil court or other tribunal is required to have proven to its satisfaction by independent evidence that the offence did in fact take place, is to relitigate the issue in a collateral proceeding.

In Franco, a physician had been convicted of sexual assault, and was subsequently sued by the victim.  The victim brought an application for summary judgment on liability, the physician arguing that his sworn evidence as to his innocence raised a genuine issue for trial.  The court granted summary judgment on liability, stating:

I acknowledge that granting summary judgment on the strength of the prior conviction comes very close to giving the conviction preclusive effect despite the absence of mutuality. I would point out, however, that there is an important difference between this robust approach to the prima facie standard and a strict or rigid application of issue estoppel. The prima facie standard affords a convicted party the opportunity to explain why the conviction should not be taken as proof of the underlying facts. If there is a good explanation, the matter may proceed to trial. The issue raised in the civil action may not be precisely the same as that determined in the criminal proceedings. There may be new evidence not adduced at the criminal trial. If the criminal charge was of a minor nature, the convicted party may not have had an adequate incentive to defend and it would be unfair to prevent the convicted party from defending the civil suit. However, where the convicted party offers no explanation and simply puts forth the same evidence that was rejected and seeks to relitigate precisely the same issue, I see no merit in allowing the matter to proceed to trial. The party has had a full and fair opportunity to litigate the issue and the interest of finality prevails. [emphasis added] 

The Supreme Court of Canada, in British Columbia (Attorney General) v. Malik, 2011 SCC 18, has also weighed in on the issue:

[46]  Whether or not a prior civil or criminal decision is admissible in trials on the merits — including administrative or disciplinary proceedings — will depend on the purpose for which the prior decision is put forward and the use sought to be made of its findings and conclusions. On this point I agree [with the Del Core decision]… that it « would be highly undesirable to replace this arbitrary rule (in Hollington v. F. Hewthorn & Co.) by prescribing equally rigid rules to replace it ».

[48]  Once admitted, the weight to be given to the earlier decision in subsequent interlocutory proceedings will rest not only on the identity of the participants, the similarity of the issues, the nature of the earlier proceedings and the opportunity given to the prejudiced party to contest it but on all « the varying circumstances of particular cases ».

The question of the admissibility of findings of a disciplinary committee in civil proceedings against an architect was examined in Spectra Architectural Group v. St. Michael’s Extended Care Centre Society, 2001 ABQB 887, wherein the court considered whether evidence of the result of a disciplinary proceeding was admissible in a subsequent civil proceeding. The court ruled that it was admissible, but cautioned as follows: 

[32] Of course I make no determination as to the weight to be applied to the evidence – and counsel for [the defendant] will have opportunity by evidence and argument to advance the proposition that the measure of weight to be accorded to it should be low. Indeed the points counsel raised relating to the questionable value of evidence that the review panel found [the defendant’s] conduct worthy of sanction, assuming that is what the evidence is, in determining the issues before me, are relevant to the question of weight. Similarly the fact that the findings may represent the opinion of someone not proved to be expert may go to weight. Also the fact that the disciplinary body was not bound by the rules of law respecting evidence applicable to judicial proceedings may have significant effect on the weight (s. 43 Architects Act).

In conclusion, a criminal or quasi-criminal conviction is prima facie evidence of the impugned conduct, and, absent a compelling explanation or a clear differentiation between the elements of the offence and the elements of the civil claim, or the provision of new evidence, the conviction will be very difficult to overcome.

A further hurdle for a convicted defendant in a civil proceeding is that the standard of proof in criminal or quasi-criminal proceedings is higher than in civil proceedings: if misconduct is proven on the higher standard, it will be difficult to argue that it would not be proven on a lower standard.  Similarly, findings of disciplinary committees are admissible, but are likely to be given less weight in civil proceedings, due to the lack of evidentiary rigour and a different standard of proof in the disciplinary hearing.  

Although the defence of a quasi-criminal offence or a disciplinary proceeding is not the insurer’s obligation under the insurance contract, the impact of the findings in those proceedings may make it of practical importance for the insurer to afford a defence to the insured in such proceedings.

Finally, it should be noted that legislation governing certain regulated professions limits the use of evidence and findings of disciplinary committees.  For instance, the British Columbia Engineers and Geoscientists Act, R.S.B.C. 1996, c 116, provides:

46  (1) A person acting under this Act must keep confidential all facts, information and records obtained or provided under this Act or under a former enactment, except so far as public duty requires or this Act or the bylaws permit the person to make disclosure of them or to report or take official action on them.

(2) Except in a proceeding under this Act, a person to whom subsection (1) applies must not in any civil proceeding be compelled to give evidence respecting any facts, information or records obtained in the course of the person’s duties.

The Ontario Regulated Health Professions Act, S.O. 1991, ch. 18, provides:

36(1.5)(3) No record of a proceeding under this Act, a health profession Act or the Drug and Pharmacies Regulation Act, no report, document or thing prepared for or statement given at such a proceeding and no order or decision made in such a proceeding is admissible in a civil proceeding other than a proceeding under this Act, a health profession Act or the Drug and Pharmacies Regulation Act or a proceeding relating to an order under section 11.1 or 11.2 of the Ontario Drug Benefit Act.  1991, c. 18, s. 36 (3); 1996, c. 1, Sched. G, s. 27 (2).

The lesson to be learned from this overview is that the relevant governing legislation should be reviewed in every instance where the insured professional also faces regulatory and/or disciplinary proceedings.

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